Luxury Electric Automaker Lucid Group to Receive $3.4 Billion in Incentives to Build its Second EV Factory in Saudi Arabia

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【Summary】​Luxury electric vehicle maker Lucid Group, Inc. announced a ceremonial signing event with the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development Fund, Emaar, The Economic City, at King Abdullah Economic City and Gulf International Bank for the construction of Lucid’s second electric vehicle factory in Saudi Arabia.

Eric Walz    Jun 24, 2022 2:00 PM PT
Luxury Electric Automaker Lucid Group to Receive $3.4 Billion in Incentives to Build its Second EV Factory in Saudi Arabia

Luxury electric vehicle maker Lucid Group, Inc. has announced a ceremonial signing event with the Ministry of Investment of Saudi Arabia ("MISA"), the Saudi Industrial Development Fund ("SIDF"), Emaar, The Economic City, at King Abdullah Economic City ("KAEC") and Gulf International Bank ("GIB") for the construction of of Lucid's second electric vehicle factory in Saudi Arabia. 

The agreement to build the new Lucid factory in Saudi Arabia was first announced in February. The factory will have the capacity to produce 155,000 electric vehicles a year and will support around 4,500 jobs.

Lucid Group CEO and CTO Peter Rawlinson was joined at the signing event by CFO Sherry House, Lucid's General Counsel, Jonathan Butler; Lucid's Managing Director, Faisal Sultan,  Middle East; and senior representatives from the Ministry of Investments, Ministry of Industry and Mineral Resources, and Saudi Arabia's Public Investment Fund (PIF).

At the event, Rawlinson also participated in a panel focused on the benefits of Lucid bringing its electric vehicle technology and advanced manufacturing to Saudi Arabia. 

Lucid's Middle East regional headquarters in Riyadh has been open since last year.

"This signing ceremony marks yet another step forward in the realization of Lucid's mission to inspire the adoption of sustainable energy, and I'm delighted this brand-new manufacturing facility will come to fruition here in Saudi Arabia," said Rawlinson. "I am truly delighted to partner with PIF, our signing partners, and the Government of Saudi Arabia in advancing our shared vision of global sustainability."

Lucid will receive significant financing and incentives of up to $3.4 billion in aggregate over the next 15 years to build and operate an electric vehicle manufacturing facility in Saudi Arabia.

The PIF, which was an early investor in Lucid in 2018, was established in 1971 to provide financing support for projects of strategic significance to the national economy of Saudi Arabia. The PIF invests in the fields of telecoms, aerospace and green technologies, such as electric cars, with a focus on renewable energy and information technology.

Saudi Arabia is looking to diversify its economy away from oil as part of the Saudi Vision 2030 and the Saudi Green Initiative.

"With today's signing ceremony, we are taking a major step towards Saudi Arabia's goal of diversifying its economy by creating a new manufacturing hub to spearhead the future of mobility for the Middle East region," said His Excellency Eng. Khalid Al-Falih, Minister of Investment of Saudi Arabia. "Attracting a global leader in electric vehicles such as Lucid to open its first international manufacturing plant in Saudi Arabia reflects our commitment to creating long-term economic value in a sustainable, enduring, and globally integrated way."

Last month, Lucid Group announced a separate agreement with the Government of Saudi Arabia for the purchase of up to 100,000 vehicles over a ten-year period. The Saudi Government's  initial commitment is to purchase 50,000 Lucid EVs, with an option to purchase an additional 50,000 vehicles over the same period.

The order quantity is expected to range from 1,000 to 2,000 vehicles annually and increase to between 4,000 and 7,000 vehicles annually starting in 2025. Delivery of the vehicles is required to begin no later than the second quarter of 2023.

Lucid says its one of the largest commitments of its kind for zero emissions electric vehicles.

The vehicles purchased by the Saudi Arabian Government will include the Lucid Air sedan and other future models built and assembled at Lucid's existing factory in Arizona, as well as the new facility in Saudi Arabia, which will be built in King Abdullah Economic City (KAEC). 

Lucid said it reviewed multiple opportunities before selecting KAEC in Saudi Arabia, an area known for its livability and sustainability, as the optimal location for the second of its global network of electric vehicle manufacturing facilities. The goal of KAEC is to become a global logistics and manufacturing hub. 

The factory will be located in an area known as "Industrial Valley" close to King Abdullah Port along the main Red Sea trading corridor, which handles more than a third of Saudi Arabia's Western Region shipping container volumes. 

Lucid officially designated the new Saudi Arabia plant "AMP-2" (Advanced Manufacturing Plant #2). The company says the factory will serve as the cornerstone of Lucid's vertically integrated global production network. 

Lucid initially plans to establish operations for re-assembly of Lucid Air vehicle "kits" at AMP-2. The kits will be pre-manufactured at the company's AMP-1 facility in Casa Grande, Arizona and shipped to Saudi Arabia for assembly. Eventually AMP-2 will build complete vehicles for Lucid.

Lucid's AMP-1 was the first vehicle factory in the U.S. purposefully built from the ground up to produce only battery-powered vehicles. The site is also home to the Lucid Powertrain Manufacturing (LPM-1) where the company will build electric motors and other powertrain components for Lucid's electric vehicles. 

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A Lucid Air sedan rolls off the assembly line at the company's AMP-1 in Arizona. (Photo: Lucid Group, Inc.)

The electric vehicle built at AMP-2 will be initially slated for the Saudi Arabian market, but Lucid plans to export finished vehicles to other global markets. Middle East regional deliveries of the Lucid Air are expected to begin later this year.  These initial vehicles will be built in Arizona.

Lucid expects that construction of AMP-2 will begin shortly.

Lucid began production and deliveries of its first vehicle, the Lucid Air sedan, late last year.  

The Lucid Air Dream Edition is the world's longest range EV, with an EPA estimated range of 520 miles, which is over 100 miles more than Tesla's Model S, a vehicle that will be a close competitor to the Lucid Air.

Lucid's CEO and CTO Peter Rawlinson credits the company proprotiary electric propulsion technology for achieving the longest range in the industry.

The Lucid Air Dream Edition Performance variant and Lucid Air Grand Touring also achieved EPA estimated ranges far beyond any other EVs, coming in at 471 miles for the Performance and 516 miles for the Grand Touring. 

The more mainstream version of the Lucid Air called the "Air Pure" is available to reserve now with a starting price of $77,400, before any EV tax credits. It has an estimated range of 406 miles.

Following the Air sedan, Lucid will introduce its first electric SUV called the Gravity, which is expected to enter production in 2023. The more affordable Gravity is poised to rival the Tesla Model Y, Audi e-tron, Cadillac Lyriq and other luxury performance electric SUVs hitting the market.

Lucid is also a U.S.-listed company. The automaker launched its IPO after completing a merger with Churchill Capital Corp IV on July 23, 2021. The combined company now operates as Lucid Group, Inc. 

Lucid's shares trade on the NASDAQ under the symbol "LCID".

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